Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2013
 

Sales and Use Tax Annotations


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U

565.0000 UNITED STATES CONTRACTORS

Annotation 565.0635

(b) "IMPROVEMENTS ON OR TO REAL PROPERTY"

565.0635 Title Clause—U.S. Government Contract. A firm has a contract to build a geothermal pumping and gravity head conversion system for a private party. The private party holds a prime contract with the United States to build and operate an experimental research program. The contract between the firm and the private party provides that title to the property involved in the contract shall pass to and rest in the United States government upon delivery by the firm's vendor. The contract further provides that such vested title shall not be affected by incorporation or attachment to nongovernment property nor shall any such government property, "become a fixture or lose its identity as personality (sic) by reason of its affixation."

The contract is a contract to improve realty and sales tax applies to sales to the firm notwithstanding the contract language. 4/30/80.